A blog of the NYU Colloquium on Market Institutions and the Leipzig Colloquium on the Market Order

Delusions of Healthcare Policy

The Wall Street Journal reports, mirable dictu, the latest Senate healthcare plan passes the Congressional Budget Office’s test for not adding to the deficit. In fact, the plan will trim the deficit by $81 billion over ten years. That is an average of $8.1 billion per year in a projected deficit that is so high I can’t remember what it is. This is your classic rounding error. Let that pass.

What is the basic financing mechanism?

“Most of the bill’s funding comes from $404 in cuts to Medicare and other government insurance programs that Democrats say will reduce waste but won’t hurt the recipients’ benefits.”

The CBO estimates do not take into account (as they cannot) the political feasibility of enacting the various cuts in waste. But I should like to refer the reader to some recent evidence that suggests that this is political fantasy.

Senator Bill Nelson of Florida: “It would be intolerable to ask senior citizens to give up substantial health benefits they are enjoying under Medicare,” said Mr. Nelson, who has been deluged with calls and complaints from constituents. “I am offering an amendment to shield seniors from those benefit cuts.”

This is just the tip of the proverbial iceberg. And the Congress has ten years to make sure the savings don’t happen.

My inclination is to say: let this healthcare program happen. The only real check will be the bankruptcy of the welfare state. Trouble is that many good people will get hurt.

6 thoughts on “Delusions of Healthcare Policy”

I disagree with your inclination. At times I have had that inclination, too. But, I think that inclination is wrong. Waiting for these programs to come crashing down years after there enactment will not only, as you say, cause good people to get hurt, but may lead to further erosions of freedom as the politicians pass more and more draconian measures to prevent them from failing. I don’t think the left will ever say, “Oh well, we tried these statist policies and they didn’t work, so now let’s try free markets.” Instead, they will pass more and more interventions in to the market to try to correct the problems that the previous interventions have caused. Or the left will say that the wrong people are in charge and we need a “strongman” to make these programs work. Healthcare “reform” needs to be defeated.

Your point is valid to the extent that government seizes upon crises to.. well.. continue to cause crises. However, one has to wonder just what it will take for people to recognize the folly of expecting anything but disaster from central planners.

Consider the fallout of the financial crisis: while it allowed the government further sweep, it was also a great boon to the Austrian School and libertarianism in general. Radicalism in favor of liberty seems to be on the rise as the government encroaches further and further on Americans. The inevitable bankruptcy of the welfare state might be just the impetus the nation needs for the right ideas to take root, as enough bewildered, concerned citizens look for answers.

Whether or not such a movement could trump the aggrandizing tendencies of the political class in a crisis of such magnitude is anyone’s guess.

Well, one should be willing to suffer for the rise of liberty, but I shudder to think of the tax increases that will almost certainly arrive, sooner or later, in one form or another, to pay for this giant new entitlement program. The other way we’re going to pay for it is through higher medical costs. Mario, this government won’t go bankrupt. It will bankrupt the middle class, instead.

Some thoughts:
1. How many times has the government revisited any program to alter/dismiss it other than expand it?
2. The brilliant 3 pronged system by the founders to keep power in abeyance will now work against attempts to reduce it.
3. The dollar will have to collapse before government stops monetizing. It is addicted and does not even acknowledge its problem yet.
4. It must be admitted openly now that a large faction DESIRES the collapse of the current system, either as ‘reformists’ or looters. There is no other explanation.